Joint Debts and Bankruptcy: Who Pays?

A joint debt is one taken in two or more names — for example a joint loan, joint mortgage or joint current account with overdraft. Both borrowers are jointly and severally liable for the whole balance.

If only one of you becomes bankrupt

• The other borrower remains liable for the full balance.
• The bankrupt borrower's name is removed from the debt on discharge — but the creditor can pursue the non-bankrupt party for the entire amount.
• The non-bankrupt partner's credit file is impacted only for missed payments that occurred before the bankruptcy marker was placed.

Practical advice before filing

• Speak to your partner before you file — they may not realise they will take on the entire balance.
• Pull your credit files to confirm which debts are jointly held (some surprise debts turn out joint only in the small print of an old agreement).
• If only one of you has serious debts and the other has limited credit impact, solo bankruptcy may make sense. If both of you have significant debts, consider joint bankruptcy or joint IVA options.

Discussing joint debts with a free debt charity before filing avoids one of the most common sources of surprise and stress in bankruptcy.